VALHI INC /DE/ (VHI) SEC Filings & Earnings Calls

Currency exchange rate fluctuations (euro) negatively impacted Chemicals operating income by ~$12M in Q2.

“Fluctuations in currency exchange rates (primarily the euro) decreased our Chemicals Segment's operating income by approximately $12 million in the second quarter of 2026.” · word for word

TiO2 selling prices still lower than prior year despite recent increases.

“Lower average TiO2 selling prices... partially offset by lower average TiO2 selling prices.”

Currency risk

“Currency transactions, net $5.0M (H1 2025) vs $(5.9)M (H1 2026)”

Environmental liability risk

“At June 30, 2026, NLI had accrued approximately $13 million related to approximately 27 sites...The upper end of the range of reasonably possible costs...is approximately $38 million” · word for word

Tax risk

“In March 2026, we received notices of assessment from the German tax authorities for tax years 2019 through 2021...recorded net income tax expense of $2.0 million to establish an uncertain tax position” · word for word

Board composition change, but no disagreement or material risk indicated.

“Resignation not due to disagreement; routine departure.”

Chemicals segment margin compression

“Chemicals gross margin decreased from $106.4M to $82.8M, a decline of 22.2%.”

Negative operating cash flow

“Net cash used in operating activities was $46.1 million for the three months ended March 31, 2026.”

High debt levels and interest expense

“Long-term debt increased from $590.9M to $624.5M; interest expense increased from $13.2M to $14.7M.”

German tax assessment uncertainty

“In March 2026, we received notices of assessment from the German tax authorities for tax years 2019 through 2021. We disagree with the assessments and have filed notice of appeal.” · word for word

TiO2 pricing pressure and lower production volumes driving significant earnings decline in core Chemicals segment.

“Chemicals operating income fell from $41.2M to $14.5M; lower average TiO2 selling prices and production volumes.”

Currency headwinds (euro) negatively impacted Chemicals segment by ~$6M in operating income.

“Fluctuations in currency exchange rates decreased Chemicals Segment’s operating income by approximately $6 million.”

German tax audit uncertain tax position resulted in $2.0M income tax expense.

“Income tax expense of $2.0 million related to recognition of an uncertain tax position related to a German tax audit.”

TiO2 Demand Cyclicality and Pricing Pressure

“Our Chemicals Segment’s overall customer demand remained weaker than expected throughout 2025, driven by ongoing economic uncertainty related to tariffs and global trade tensions, as well as persistently high interest rates and elevated home prices which are impacting housing mobility.” · word for word

Tariff Exposure on Canadian TiO2 Production

“As our Chemicals Segment currently manufactures a significant portion of its North American TiO2 in Canada, if sustained for an extended period of time, a tariff on our Chemicals Segment’s imports into the U.S. from Canada would make its products manufactured in Canada and sold into the U.S. more expensive.” · word for word

Raw Material Cost Volatility

“Our Chemicals Segment experienced increases in feedstock costs in 2023 and 2024, which negatively affected its margins.” · word for word

Lead Pigment Litigation Liability

“NL and others have been named as defendants in various legal proceedings seeking damages for personal injury, property damage and governmental expenditures allegedly caused by the use of lead-based paints.” · word for word

Environmental Remediation Costs

“At December 31, 2025, NL had accrued approximately $13 million related to approximately 27 sites associated with remediation and related matters.” · word for word

Sustained low capacity utilization and unabsorbed fixed costs indicate potential structural demand weakness or competitive pressure in TiO2 market.

“Unabsorbed fixed production costs of $54M in Q4 2025; capacity utilization dropped to 55% from 97% YoY.”

Non-cash deferred tax expense from German tax rate reduction and valuation allowance adds to earnings volatility.

“Non-cash deferred income tax expense of $8.5M in Q4 and $19.3M for full year 2025.”

Chemicals segment margin collapse

“Chemicals operating income (loss) was $42.6 million and $(15.9) million, respectively, for the three months ended September 30, 2024 and 2025.”

Operating cash flow deterioration

“Net cash used in operating activities $(1.8) million and $(136.1) million, respectively, for the nine months ended September 30, 2024 and 2025.”

Environmental remediation liability

“At September 30, 2025, NL had accrued approximately $13 million related to approximately 29 sites associated with remediation and related matters.” · word for word

Trade policy uncertainty and geopolitical tensions prolonging TiO2 market downturn, impacting sales volumes and pricing momentum.

“unprecedented global uncertainty related to U.S. trade policies, geopolitical tensions and general hesitancy by customers to build inventories which has prolonged the market downturn” · word for word

German tax legislation change causing $19.3M non-cash deferred tax expense, negatively impacting net income.

“increase in the Company's tax expense due to legislation enacted in Germany during the third quarter of 2025, which resulted in a non-cash deferred income tax expense of $19.3 million” · word for word